Correlation Between BioInvent International and Orexo AB
Can any of the company-specific risk be diversified away by investing in both BioInvent International and Orexo AB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BioInvent International and Orexo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioInvent International AB and Orexo AB, you can compare the effects of market volatilities on BioInvent International and Orexo AB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BioInvent International with a short position of Orexo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Orexo AB.
Diversification Opportunities for BioInvent International and Orexo AB
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BioInvent and Orexo is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Orexo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orexo AB and BioInvent International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BioInvent International AB are associated (or correlated) with Orexo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orexo AB has no effect on the direction of BioInvent International i.e., BioInvent International and Orexo AB go up and down completely randomly.
Pair Corralation between BioInvent International and Orexo AB
Assuming the 90 days trading horizon BioInvent International AB is expected to generate 1.16 times more return on investment than Orexo AB. However, BioInvent International is 1.16 times more volatile than Orexo AB. It trades about 0.13 of its potential returns per unit of risk. Orexo AB is currently generating about -0.05 per unit of risk. If you would invest 1,498 in BioInvent International AB on August 25, 2024 and sell it today you would earn a total of 2,957 from holding BioInvent International AB or generate 197.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioInvent International AB vs. Orexo AB
Performance |
| Timeline |
| BioInvent International |
| Orexo AB |
BioInvent International and Orexo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and Orexo AB
The main advantage of trading using opposite BioInvent International and Orexo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, Orexo AB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Orexo AB will offset losses from the drop in Orexo AB's long position.| BioInvent International vs. Hansa Biopharma AB | BioInvent International vs. Saniona AB | BioInvent International vs. Active Biotech AB | BioInvent International vs. Oncopeptides AB |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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